New York, 26th July 2008
DON’T: be like Nokia in a downturn
About 10 years ago, Nokia had the best selling phones in town. Everyone bought Nokia, they were the best looking, the best functioning and the most trendy you could get (yea, believe it or not), so any self-respecting person wouldn’t be seen dead with anything else. But where are they now? What happened to their number one position in the provision of this new need we have: to be available and accessible at all times?
I believe Nokia actually made a crucial error. They did not pay attention to their customers. They were very busy concentrating on the phone, how it looked, how it worked, the technology behind it, making the first small phones there were etc. And they managed to do all of that perfectly well. But when it came to responding to their customer complaints, they were very very bad. Their was a great example – at one point, I sent a phone to Nokia that had stopped working well before you should normally have expected its demise. I did receive a response back – but it merely stated that I had probably dropped it in water and therefore it was not their fault but mine. Ofcourse I was fuming, but I got really really angry when I found out that my friends had had exactly the same response to very different problems with their phones. So it became a running joke – if you had a Nokia that didn’t work, someone would say "Oh, you must have dropped it in the bath"… but in the longer term ofcourse the joke was on Nokia. When you are treated like this as a customer, you stop buying the product. So whilst they may have thought it was saving them costs, it turned against them and cost them heaps of revenue….and their position as marketleader.
This week I read in the paper that Circuit City (a well-known electronics store in the US) is laying off it’s technical support staff. It was also in the papers that Best Buy (another well-known electronics store) was increasing its number of customer service people. Very interesting. In economic downturn, companies lay-off staff…but laying off your support staff may not be the best idea a CEO has ever had. If I go to an electronics store and want to buy a piece of technology, I really like to be helped by someone who understands, rather then having to find my way through a zillion cool packages that all shout "buy me, I am the best". I want someone to tell me that "the best" applies to my situation, to my other technology that I would really like this clever gadget to interact with etc.
I was in Best Buy the other day looking for a FlipCam – and the guys there really knew their stuff. They knew it so well that I actually did not buy one because it would not work with my Mac – but they also told me that a couple of weeks later there would be one that did…so ofcourse I’ll go back to them rather then anywhere else. I was a happy non-customer at that time, looking forward to buying my cool gagdet a little later then I wanted, but hey, at least I knew it would work! This is the importance of customer support – you tie your customers to you by your experience and knowledge of your products. You create a "buying" environment – rather then putting your customer off by making it impossible for them to know what to buy. Or worse, by putting them off the product completely because although it technically may be the very best – you forget that they need reassuring from time to time, particularly when it doesn’t work.
So in economic downturns, you need to invest in your customer. Keep them happy and they will do your marketing for you. Be like a Best-Buy and get more support staff rather then Circuit CIty lay-offs. It’ll pay itself back for a loooooong time.
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